Why opt to form a one-person company?

Why opt to form a one-person company?


One Person Company Registration is an innovative idea that encourages the incorporation of micro, small, and medium-sized firms and individuals with entrepreneurial goals without requiring capital or other methods to recruit other partners to carry out the company plan.

The merits of an  opc registration include giving the sector of proprietorship a legal entity while also providing individual business owners with all the advantages of a company, including access to the market, limited liability, financing, and protection under the law. Let’s quickly go through the advantages of a one-person business.

What is Eligibility for a One-person Company (OPC)?

One Person Company, or OPC, refers to a business with just one member. Under the Companies Act, an OPC is categorized as a private corporation. OPC enjoys all the advantages of a private limited company, including sufficient certainty, distinct legal status, and protection of individual assets from business debts. A One Person Company (OPC) is a company that has only ONE PERSON listed as a shareholder on its registration.

Only a single individual who is of Indian nationality and a citizen may own a one-person company. A one-person company can only have one shareholder, who is not a corporate entity.

The opc company in india is not subject to any minimum or maximum paid-up capital restrictions. It may be changed at any moment to a private limited or public limited company.

No partners may be added to a one-person company (Shareholder). OPC, however, has the option to become a public or a private limited company and add partners (shareholders).

What are the benefits of OPC registration?

The main benefit of filing as a One Person Company is Sole Ownership, but there are other benefits as well. Being the sole proprietor of a company enables you to keep any revenues generated without having to split them with any other party. An OPC’s capacity to provide limited or restricted liability for the single owner in certain situations is the decoration on the cake. An OPC can also benefit from readily accessible finance, a complete digital incorporation process, qualifying as a small business, and perpetual existence. Each of these advantages has been described in the section as follows.

  • Distinct Status as a Legal Individual

The ability to function as a distinct legal body is among the major advantages of registering an OPC. This was not conceivable prior to the 2013 Companies Act’s passage. The director or shareholder of the company has the authority to act independently thanks to the distinct legal standing of the entity.

  • Firm’s Limited Liability

The application of the restricted liability concept is a benefit, if not the primary reason, why individuals choose OPC registration. The phrase is viewed as a ceiling on the shareholder’s or director’s responsibilities. As a result, in the event of a disagreement over the business’s obligations, the director’s personal assets cannot be claimed by the creditors of the firm.

  • Simple to control

The OPC may be founded and maintained by a single person, making administration simple.By entering the ordinary and special resolutions in the minute book and having only one member sign them, the member can simply pass them. As a result, operating the business will be simple because there won’t be any internal conflicts or delays.

  • Proprietorship Organizational sector:

The OPC uses the unorganized proprietorship sector in a single rendering of a private limited company (PLC). individuals who work only for various/different kinds of small and medium-sized businesses. They are able to register the business in the corporate sector. The OPC unified version makes room for the much-needed banking function. Owners are always responsible for and liable for everything. If these owners do business through the OPC, the member’s care is constrained.

  • Adequate Protection

An additional person should be named as the nominated director in the event of the lone person’s death or disability. When the original director passes away, the company’s business will be handled by the nominee director until the day shares are transferred to the member’s legitimate heirs.

  • Banks provide Loans Easily

Financial and banking organizations favor lending money to businesses over proprietary ones. Banks typically demand that business owners turn their organization into a Private Limited company before approving funding. Therefore, registering your business as a One Person Private Limited rather than a Proprietary Firm is preferable.

  • Continuous succession

Even with just one member, the OPC has the property of everlasting succession. The single member must designate a candidate while incorporating the OPC. When a member passes away, the nominee will take over the management of the business.

  • Regular Emergence

OPC may endure after the death of its only stakeholder. The nomination of each succeeding OPC shareholder makes this feasible. A person is obligated to designate a nominee as the successor owner of an OPC immediately after becoming the OPC’s owner, in the case of his death or his permanent absence. A nominee need not be the owner’s legal heir and may instead be any person the owner chooses. But only with the owner’s permission may someone be chosen by the owner to serve as a nominee. The application for updating/replacing the name of the previous candidate with the new nominee must include notice to the ROC of the nominee’s permission.

  • Other advantages

A one-person business can take advantage of the many advantages offered to small-scale industries, such as lower interest rates on loans, simple bank funding up to a specific amount without putting up any collateral, several advantages under foreign trade policy, and others. Any firm may profit from all of these advantages in their early stages.


There are several compliance standards that must be met as part of the OPC registration procedure. Additionally, private limited corporations and other similar organizations have slightly varying share capital requirements and registration rules. Small businesses with typical development should apply for registration as this form of the company since the compliance requirements are simple. The registration procedure should ideally be conducted with the assistance of a reputable legal or financial consulting firm. The company will be able to manage the entire procedure for a reasonable fee.

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